VAT Tribunal decision on Align Technology

The Upper Tribunal has released its decision in the case of HMRC v Align Technology Switzerland GmbH [2026] UKUT 00256 (TCC). Overturning the earlier First-Tier Tribunal decision, which found in favour of the taxpayer, the Upper Tribunal ruled that Invisalign clear aligners are not dental prostheses for VAT exemption purposes. 

Align Technology had treated supplies of Invisalign clear aligners as exempt supplies of dental prostheses. HMRC disagreed and considered the supplies to be standard-rated. The First-tier Tribunal found in favour of Align, as it considered that the aligners were health-related products supplied by dentists and dental technicians in the course of treatment, so to exclude them would be unduly restrictive. HMRC appealed the decision to the Upper Tribunal.

The issue considered by the Upper Tribunal was relatively straightforward – were the aligners dental prostheses?

As the term ‘dental prostheses’ is not defined in legislation, the Upper Tribunal approached the issue by considering the ordinary meaning of the word. It found that a prosthesis is an artificial device that replaces a missing or damaged body part or performs the function of something that is absent or no longer functioning properly.

The aligners did not perform this function – they are used to move teeth that are already present into a different position; they do not replace missing or damaged teeth. The tribunal accepted that the aligners may be health-related products but found that the legislation was not drafted in a way that includes all health-related products; it was drafted to apply to dental protheses specifically. As a result, the Upper Tribunal found in favour of HMRC, ruling that the aligners were not dental prostheses. 

Although the area of VAT considered in the decision is relatively niche, the significance of the decision extends beyond the dental sector. The tribunal’s approach – considering the ordinary meaning of ‘dental prostheses’ – can be applied broadly where VAT legislation uses terminology that is not specifically defined. 

The decision also reinforces the principles that VAT exemptions are construed narrowly. Prima facie, aligners fall within the spirit of the exemption; however, the tribunal was concerned with the wording of the legislation rather than the broader social purpose of the exemption.

Although the taxpayer may appeal the decision further, HMRC’s position is likely to be that the Upper Tribunal has settled the matter, unless there is a further appeal.

Businesses selling aligners or similar products should review their VAT position as a matter of priority, including assessing the nature of the supplies made and potential exposure to VAT, penalties and interest. 

The decision gives HMRC a clear basis to review the VAT treatment of aligners or similar items across the sector, so it would not be surprising if HMRC were to follow up with businesses supplying these goods. Businesses should therefore proactively consider whether a disclosure is necessary rather than waiting for HMRC to raise the issue.

For further guidance on the above, please get in touch with your usual Crowe UK contact.